Mining Indaba: Susan Shabangu misses chance to allay investor fears

2014-02-05 11:54

Some delegates were disappointed by Mineral Resources Minister Susan Shabangu who, in her opening address at the country’s Mining Indaba, made no attempt to bolster the dwindling prestige of the mining industry.

Many delegates hoped Shabangu would clear up the uncertainty of the implications of declaring certain minerals to be strategic minerals, but nothing came of it.

The legislation makes provision for strategic minerals – coal almost certainly one of them – to be declared strategic minerals. Mining companies will then have to obtain Shabangu’s approval before they can export any coal.

She will also be given the authority to require that a percentage of the production of “designated minerals” be sold to local processors at prices determined by Shabangu as the minister “on the basis of a value chain”.

“We do not expect mining companies to make bottles or laptops, but unprocessed minerals that are exported deprive us of the opportunity to create jobs. We will try along with the industry to promote development,” she said in answer to questions about this yesterday.

Legal experts say the wording of the legislation provides for the mandatory supply of minerals at “cost plus” contracts – the same way in which Eskom has for decades bought coal at designated collieries.

However, this discourages new investments in the development of coal mines, while Eskom is facing an enormous shortage of coal after 2018. The electricity giant consumes about 170 million tons of coal per year, but must find new sources for about 40% of its coal needs after 2018 because the mines in Mpumalanga are becoming depleted.

“She spoke superficially about this and said nothing about the finer details of the legislation that investors are extremely worried about. I think she allowed a wonderful opportunity to slip through her fingers where she could’ve allayed investors’ fears,” said one of the country’s leading mining investment consultants, who declined to be named.

Shabangu appeared indifferent to the strike that has brought the country’s struggling platinum mines to a standstill and said it was the workers’ constitutional right to strike. “The government has already shown decisive leadership to restore peace and order in the mining industry,” she said.

Chamber of Mines economist Roger Baxter said during a panel discussion about 40% of the mines where there are strikes are loss-making or are earning marginal profits.

- Sake24

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.